Hey all,
Currently my partner & I live in a mining town (Mt Isa), we are both on about 110k salaries. My partner has a government job which provides us a house here rent free. We are currently paying down some debt. My partner owns a house in Townsville which she and her sister brought off their father for 200k which i am sure was well below market value. The are currently paying P&I on it and i think have paid off half the loan so far. We were thinking of using 50% of the equity to get ourselves an IP or 2 or what ever.
I am the one that is interested in investing, my partner is just happy to put the money in. What I would like to achieve is to replace my income or close to it with passive income, while i am on good money. My job sucks but its a means to an end, and is shrouded in uncertainty due to the merger with Glencore. I would like to purchase through a buyers agent as flights are expensive in and out of here. I am trying to educate myself as much as possible and have read a fair few books etc. I would like to buy and hold our properties, and keep away from mining towns if possible. I would like to also avoid negative gearing too much, as i may only have my job for 6 more years who knows. Rather make money.
If any one could help with any Ideas or Strategies or even a template for writing up a plan it would be much appreciated.
Hi Kade
Welcome aboard.
You've got a plan – now you just need to break it down into achievable milestones.
Work out how much passive income you need to reach your goal of replacing your PAYG income.
From there, you can work what sort of portfolio you'll need in order to reach that level of income.
Your salaries put you in a fantastic position as far as borrowing capacity goes. Having access to equity to get started is also great. Keep in mind though that if your partner shares the property with her sister, then her sister will have to be agreeable to any equity release against the property.
When you're ready to start investing – surround yourself with a team of professionals. A decent broker and accountant are a good start – and also a buyers agent as you've mentioned.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hey Jamie,
Thanks for the advice. So basically to replace my salary i would need passive about 100k. So say i would need 7% return on about 1.5mil. This is where i get confused, books and stuff talk about that but what i cannot seem to get is where is the money? 1.5mil of property is in a sense paper money, so would i be trying to look at a rental yield of 100k a year?
As for my partners sister we are currently in the process of getting my partners name on the deeds and loan. My partner had default due to fraud on her credit card back in the day and was sued by Westpac (not her fault). That was over 7 years ago now but she has been paying 50% of the loan with her sister. So once the loan/deeds and new market appraisal is done will will know how much equity we have.
Our financial advisors YBR recommend we go through them to sort out sourcing/purchasing property, not sure how i feel about that as they aren't really an IP specific business. Will see what their plan for us is. Sadly with living out here we are very limited to making in making a good team due to the lack of services out here and well too many people are in it for themselves out here as well.
Hi Kade
You don't need to be restricted to professionals in your area – if you're comfortable in dealing via email/phone then you can use anyone from anywhere.
Get your partner to grab a copy of her credit file so she can check if the default's been removed before you start applying for any finance.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Kade,
Good to see a fellow Mt Isan on the forum!
Hopefully you stick around.
Personally I wouldn't go through YBR, I have never been in the place so I could be wrong but generally places like that leave alot to be desired. I can personally vouch for Jamie as I use him myself. Living in Mt Isa and using a mortgage broker in Canberra sounds strange but is really quite easy. In my opinion you would be mad not to give him a call.
And yes, basically you would need 1.5mil of property (debt free) returning a yield of 7% to achieve your passive income goals.
Obviously the higher the yield of the properties the less you need…
Thanks for the wrap Nathan
I know it's mentioned every day but location really isn't an issue with most of these service type professions.
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Thanks to both of you.
1.5mil sounds like a lot but honestly i don't think its that much realistically, just a little scary. Talking to the missus and well she is not interested in the investing side just willing to put money towards it.
Yeah we currently use YBR for our financial plan and what not, and i cannot say a bad thing about the team up here. Jayesh has been extremely helpful and i have not ever paid them out of my pocket. When hes in brisbane he also drives over and sees my dad at nudgee and does not charge a thing. I guess in regards to my goal, i'll write it out what i want and put it forward to them and see what plan they come back with. I would prefer someone that is into property investing then just general investing but i guess we'll see what they come up with.
They were also talking about when getting the loans going P&I in order to build equity that way. But from everything i have read every one seems to be going interest only. Have not hear much for benefits of P&I. So yeah i guess i'll just have to wait and see what they come up with.
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